Deflation has a bad name among today’s economists, and this should be your first clue that it might be something good. These educated Keynesians, as we’ve seen, can’t see a bubble until it explodes in their faces, at which time their zombie economy starts to wobble and nightmare possibilities abound, the worst being “it” might happen, as it did in the 1930s. They immediately turn to god (the FED chair) and pray that he or she will do what is right. As we know, Ben Bernanke built his reputation making sure “it” doesn’t happen here.

In a speech delivered in circa 1976 and reprinted in The Rothbard Reader, Murray Rothbard gives us a different view of deflation. First, what is it? Deflation is falling prices, he says, veering for the sake of discussion from the usual Austrian school definition as a contraction in the supply of money. Even Bernanke could accept deflation defined as falling prices. What he doesn’t accept is another assertion of Rothbard’s: The trend in an unhampered free market economy is usually a falling price level. It’s the unhampered part Bernanke can’t digest. Unhampered would mean no FED, no FDIC, freedom of people to choose the money they wish to use — the usual unthinkable conditions for Keynesians.

Rothbard could think of those things quite naturally. Falling prices are “glorious effects” of a robust free market, “even in the face of our general inflationary trend.”